As video sites on the Web struggle to find a business model that will pay their mounting bandwidth and storage bills, many of them are trying to reinvent themselves. Veoh, which has raised a total of $70 million, had to cut 35 percent of its staff earlier this month and the site seems to be losing steam. Unique visitors are down 18 percent from their high a year ago to 15.2 million worldwide, and users of its desktop app VeohTV are down 40 percent to 7.2 million worldwide, according to comScore (see chart below).
Founder Dmitry Shapiro is now back as CEO and he is pouring the company’s remaining energy into a new product launched six weeks ago called Video Compass (read our review). Since launch, it has been downloaded 800,000 times, and is currently being downloaded at a rate of 25,000 a day. Video Compass may amount to a Hail Mary pass to try to save the company. It is an attempt to spread video search across the Web by bringing you search results when you don’t even know you are looking for videos.
The way it does this is through a browser add-on for Firefox and Internet Explorer that is triggered whenever you do a search on a growing list of sites, including Google, Yahoo, Amazon, Craigslist, Wikipedia, and even YouTube. In the past few days, it just added Twitter Search, MySpace, Hulu, DailyMotion, and Metacafe. Up next will be Flickr, Photobucket, and Facebook.
Whenever you do a regular search on these sites, a ribbon with Veoh video search results pops down triggered by the same keyword you are searching. For instance, if you are searching for “police” on Amazon, a bunch of Police music videos appear along the top ribbon, along with some car chase footage. You can cycle through the videos by clicking an arrow to see more results in the ribbon or you can click on related tags along the top (”Sting,” “crime,” “japanese police”) to refine your search.
If you click on any of the thumbnails, a semi-transparent player opens up and lets you watch it in-situ, without necessarily going to Veoh.com. When you are done, you close the window and you are back at where you left off.
I’ve been testing Video Compass for the past few days, and the video results pretty decent. I find them to be a bit redundant on other video sites such as YouTube, but they can sometimes offer better results on narrower video sites. For instance, try searching for “Moldova” on Hulu and you get one result, whereas the Veoh Video Compass bar turns up plenty of protest videos. And do a search on Twitter and it adds a whole different dimension to your search. Even searches on Google bring up more video results than occur naturally. And you can always turn it off if it starts to annoy you.
The big question is can Veoh create a business around a browser add-on? That all depends on how much of a habit people make of clicking on the Veoh video results and how good they are. Veoh has developed its own behavioral targeting technology which generates both video recommendations and helps target advertising. Shapiro tells me:
Today we are doing a pretty good job monetizing Veoh.com. We serve pre-rolls (at high CPMs), mid-rolls, overlays, and targeted display units. Our behavioral targeting engine lets us get higher CPMs than our competitors, while selling out more inventory. While I can’t share the exact numbers with you, I can tell you that our quarters are in the millions and every quarter has been a record quarter, although we are not cash flow positive yet.
With Video Compass, he can promote content from partners directly in the toolbar when people are conducting associated searches elsewhere on the Web. Movie trailers would be one obvious type of content to promote, but sponsored video ads of all stripes could be placed in both the results or during playback. There is also a lot of empty real estate around the player that can be filled with ads in the future. Finally, Shapiro is working on ways to drive users back to Veoh.com where the monetization model is more clear. So he is not giving up on his destination site entirely.
Relying on people to download his add-on, however, is a risky strategy. Not only does it require people to go out of their way, as more and more browser add-ons adopt similar triggering mechanisms, conflicts could emerge. For instance, Glue has a similar user interface, although it is not triggered by searches. But you can imagine a time when two different add-ons are both triggered and either one cancels out the other or the top of the browser becomes a mess. This is essentially the same problem people have with the new Diggbar and other Website framing mechanisms. They can create a lot of clutter instead of helping you cut through it.
Don’t know if you did it on purpose, but in the first paragraph you spelled “the” wrong – “teh site seems” – is what you have… also on the topic…Veoh isnt the same…I myself stopped using it.
Speaking of spelling… check out your name
Ouch.
LOL, we all have different names,and some are even spelt differently – thus I think spelling has no meaning when it comes to names.
teh deadpool
Online video is extremely powerful in educating and empowering people, monetizing it however, is a lot harder, as all of you know.
Maybe it is high time that we go to a resource based economy, and put the money game behind us?
Glad someone else sees the money system is slowing down the human race and no I’m not a star trek geek.
Its a good idea of taking video search on engaging sites. Videosurf has a SearchMonkey plugin which shows their results on a search page (they support very few sites though. google.com, yahoo.com etc). Veoh seems to have extended a similar idea and supporting lot many sites.
veoh is definitely in the deadpool. Cutting half their staff and switching strategies is a sure sign that they’re running out of cash. It’s sad to see that dimitry shapiro has wasted $70million in funding when there are so many other more innovating startups that could have done much more with that money.
Cut them some slack. IF ANYONE IS OLD ENOUGH TO REMEMBER, VEOH came into being right behind YouTube, along with Vimeo/Revver/Brightcove/now-Crackle/etc. — Yes, VCs threw money at them (bless those days), but, NO ONE IN THIS SPACE has figured out a great business model and they burn through money because they burn through bandwidth. YouTube’s projected to LOSE $470k this year? Without Goog propping them up, they’d be deader than day-old fish.
BRIGHTCOVE abandoned it’s mission and strategy a few times and guess what? They’re alive. Adapt or Die.
The problem with most/all of these ventures is they never learned how to be a “Distributor” in the film industry sense of the word. They are networks without distribution “Rights” (value). They never tapped into the traditional media talent pool to truly converge the Industries. Yes, they could have used their money in a less-geek’d out sort of way and maybe become sustainable businesses.
Hence, we’re stuck with Hulu, which is old media on a new screen and the shining golden child of “newteevee.” Hulu is part of a distribution chain, it’s not a standalone tech network.
VEOH tried (a bit) with their Prom Queen deal, etc., but, there are only so many B. Diller’s in the world and VEOH wasn’t pro-active in more alliances of that nature. And, they didn’t nab ownership in the distribution Rights.
Technology isn’t Content.
$70MM later, there are no tangible/valuable assets. Because they didn’t understand Distribution. That’s kind of sad, because no one has an exit strategy or safety net.
Hopefully, Dmitry’s Twitter quest for a date will end better than his company has.
$470M you mean. I doubt Youtube will ever be close to only losing $470K haha. They’d probably have a party if the loss was so minimal!
ooooops, what a difference a letter makes.
i’d first written ‘NEARLY HALF A BILLION’ which I should have stuck with. And, that’s ANNUALLY, so, VEOHs paltry total loss is nada in comparison.
youtube sure makes a great write off that’s for sure.
The search is a nice concept, but I hate frames period.
add them to the deadpool. it’s an idea struggling to find a reason to exist.
Desperately trying to find a buyer.
checking into, seems desparate
I just downloaded the veoh player and ended up getting the Vundo trojan on my machine (http://en.wikip....org/wiki/Vundo). Can’t be 100% certain it came from the Veoh player, but I am normally very paranoid about installing software on my machine and this was the only new piece of software I installed in the last month (other than security patches).
Tried downloading the veoh player again (with my file monitor on). Looks like the player is fine. Can’t figure out where I got my trojan from….
veoh is slowly dying out. Esp megavideo taking a shitload of marketshare.
Megavideo nothing but a streaming version of Pirate Bay. They are a lawsuit waiting to happen.
Their time and funds are rapidly evaporating.
Loving these comments
Let me just chime in here for a sec and set some things straight :
1. Veoh is not going out of business (at least not today)
. We have one of the largest video services on the Internet with over 23 million monthly users (40% of them US based), that watch over 200 million videos per month. Comscore is wrong as usual, but I won’t get on that soapbox. Our VeohTV product, that is cited in the chart, was sunsetted months ago and that is why you see the dip. The product was replaced with Veoh Player which continues to grow in users, but is not tracked by Comscore.
3. We have been monetizing Veoh for over a year, and have a pretty large roster of blue chip advertisers that are very happy with our performance and continue to do additional buys.
4. Like most smart companies we are making sure that we are running lean and mean. Those that understand business will realize that this is a good thing and not a bad thing.
6. While Veoh.com continues to be our primary business, we realized that simply continuing to innovate in the box will get marginal growth. To gain great growth and take that number to 100 million unique users per month, we must think outside the box. This is where Veoh Video Compass comes in. Compass will dramatically grow our user base by providing users a must-have browser extension that helps them discover video as part of their everyday web browsing/searching activities. We are adding major sites every week to Compass’ list of supported sites, and already generate as many daily searches thru Compass as happen on Veoh.com. We are also adding great features to Compass that will make it even more compelling to users, content owners and advertisers.
Hope this helps….
Good luck. And when is Comscore ever right? I wish people would stop giving so much value to them and similar services.
Erik’s original query was how do you make money out of a browser plug-in ?
Dmitry Shapiro is a rude boy! I hope his Video Compass innovation works out for him, allthough I think the innovation is ahead of it’s time.
The players in the Web TV space fired the gun to early, to much flux to really make an impact in the digital entertainment wave, ask netflix; YT is eating up the stragglers and the mayors for breakfast,
If your in Web TV with the current YT un-official M&A pro-content campaign, then your VC has to be golden.
I keep hearing the phrase “content is king” but it seems “uniques are king”.
Veoh still blocks half of the world from viewing their videos…
Uh,… if VEOH is throwing Hail Mary pass, why is the head of sames floating a business plan (as we speak) to spin out his group into a premium vid ad sales company?
Didja see the spiffy new offices in Santa Monica? Just finshed ‘em! Wonder what that cost…
D-E-A-D P-O-O-L
why isn’t Digg.com on their list?
Video Sites should start putting a charge of uploads of say 50p for 5 video uploads – that is the only way around it, if people want the service – then pay!
nice post